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A survey from the University of Michigan and Thomson Reuters released Friday showed consumer confidence has hit its highest level since 2007.

Much of the federal bump came from defense spending, which increased by 13 percent in the third quarter after having decreased 0.2 percent in the second. Meanwhile, nondefense federal spending increased by 3 percent this quarter after having tailed off slightly in the last one, according to the report.

The GDP report is only an advance estimate of quarterly growth, but both of the updates — which use new information to produce increasingly accurate results — will come after voters have cast their ballots.

The lukewarm GDP report prompted discussion of the looming “fiscal cliff” — a collection of automatic spending cuts and tax increases set to take effect at year’s end. Congress and the White House have expressed interest in a deal to pull back from the cliff, but they are deadlocked over Obama’s push to let tax rates expire for the wealthiest Americans.

Krueger fired a salvo in that debate Friday, urging Congress to pass legislation that would extend the tax cuts for those making less than $250,000 annually.

House Republicans favor extending those cuts as well, but they have refused to approve the extension as a stand-alone measure because doing so would leave them without leverage in the battle over income rates for the highest earners.

House Speaker John Boehner pivoted off the GDP report to blast Obama’s economic stewardship and push the president to extend the high-end tax cuts.

“House Republicans have acted to avoid the ‘fiscal cliff’ by replacing the president’s sequester, stopping the looming small business tax hike, and paving the way for long-term solutions to spur economic growth through tax and entitlement reform,” the Speaker said in a statement.

Friday’s GDP report underscores the importance of the across-the-board spending cuts, which would include the defense spending that drove much of the third-quarter growth.

The National Association of Manufacturers on Friday released a report saying that even before it takes effect, the uncertainty surrounding fiscal policy will cost the economy 0.6 percent worth of GDP growth in 2012, as well as about 1 million jobs.

Top corporate executives have said their firms will postpone major investment decisions until the fiscal debate is resolved. Friday’s GDP report showed business investment was largely flat in the third quarter.

Seung Min Kim contributed to this report.

This article first appeared on POLITICO Pro at 8:37 a.m. on October 26, 2012.

Where did you get the 1.6? It was actually 1.8 predicted. And did you notice the inflation rate in the same report was 1.8% leaving a net .2% growth? Why not go all out next time and headline your article Re-Elect our fearless leader ... pretty please...

Wait until after they election, they will downgrade. Government was up 9% but you will not hear about that as it would interfere with BO's talking points. This election is such a joke. BO is out of control when he wants to win. I have never seen a president that looks so evil.

Enemic is better than being dead - BUT enemic and GROSS DEFICITS are a prescription for the MORTUARY. Our loyal, biased and Obama fed media will try to make anything smell good if it helps Obama smell better. I guess the message came down from President Axelrod to promote the pathetic 2% growth as a winner - so this is what we got. So sad, how far our media has fallen.

Of course desperate conservatives swarm around any good economic news and attempt to downplay its significance. Imagine how much better than number would be without all the Republican obstructionism, or, better yet, imagine what our GDP would be without 8 years of Bush.

The average GDP growth for the first three quarters of this year is 1.77 percent, according to data released by the the Bureau of Economic Analysis this morning. That is less than half of what the White House predicted GDP growth would be this year, and less than a third of what the Obama administration projected when it first took office. …

When Obama first came into office, in 2009, the White House projected that GDP growth this year (2012) would be 4.6 percent. Then, in 2010, the White House downplayed that projection to 4.3 percent. And last year, the forecast looked even gloomier, at 3.6 percent.

But as the numbers show, the three quarter average of this year came in even worse: 1.77 percent.

http://tinyurl.com/9sv5...

Barack Obama told us he would achieve a 6.5% unemployment rate and 4.5% GDP by now......He failed to deliver.

Steady growth. Compare to four years ago under Bush-Cheney when jobs were being lost at 800,000 per month, the defict left behind was $1.3 trillion, and the DOW was 7,949 with an entire administration put on the US credit card including 20+ years of combined wars whose lifetimes are war bills and costly VA heathcare are still coming in. Apparently, peopel have a short memory who created the mess we were in and which party has done the most to get us out of it. Hint: not Republicans.